The persistence of many threatened species depends on isolated habitat patches such as conservation parks, fenced reserves, and islands. While these ‘conservation arks’ provide refuge from many contemporary threats, they can also pose risks of genetic diversity loss and inbreeding depression, further exacerbating extinction risk. A pertinent exemplar is the Kangaroo Island koala population in South Australia, which originated from a few translocated founding individuals in the 1920s, but now sustains a large population with low prevalence of infectious disease. We investigated the extent and consequences of founder effects on genomic diversity, inbreeding and adaptive potential in Kangaroo Island koalas by comparing them with mainland Australia populations, using high-coverage whole genomes. Our findings support sharp, recent declines in effective population sizes (Ne) in both mainland and Kangaroo Island populations. However, Kangaroo Island koalas had much lower individual and population-level diversity. Together with longer and more numerous runs of homozygosity, and an increased proportion of realised genetic load, these results support the hypothesis that a severe bottleneck has contributed to inbreeding and mal-adaptation in Kangaroo Island koalas. While Kangaroo Island has the potential to conserve a viable population of koalas, we recommend genetic rescue to restore diversity and mitigate inbreeding depression in this isolated population. Our results emphasise the need for longitudinal genomic monitoring and genetic management to maintain long-term viability and resilience in potential conservation arks. Understanding the demographic history of such populations will help inform future conservation aimed at preventing genetic erosion and preserving biodiversity.